Banker to repay Â£250,000 bonus

A City high-flyer was ordered to pay back a £250,000 bonus with interest to his former employers today after three judges ruled it had been paid by mistake.

Commerzbank took Gareth Price-Jones to the Court of Appeal after a deputy High Court judge ruled in December last year that he was entitled to bonuses totalling £515,000 for a year.

Mr Price-Jones, of Fitzjohn's Avenue, Hampstead, north London, began working for Commerzbank as an investment banker in April 2000 when he was 30.

He was eventually made redundant in November 2001 and during that period was promised a total remuneration package of £1 million, reflecting the bank's view of him as "exceptional".

Part of the package was a guaranteed bonus of £250,000 a year but in June 2000 Mr Price-Jones received a letter from his employers confirming his bonus as £265,000, which he understood to mean in addition to the guaranteed sum.

Deputy judge David Phillips QC said Mr Price-Jones was entitled to believe that the £265,000 was a "lock-in payment" intended to persuade him not to leave the bank.

He said: "The bank was pleased with the initial performance of Mr Price-Jones whom they regarded as a high-flyer."

It was agreed at trial that the bank had made the initial £250,000 payment to Mr Price-Jones by mistake and only intended to pay him an extra £15,000 bonus.

But the deputy judge ruled that contracts signed by Mr Price-Jones over the bonuses meant he was entitled to both sums.

The judge said that if Mr Price-Jones had understood he was being offered just a £15,000 increase on his guaranteed bonus, he would have left Commerzbank and found employment with another bank.

But Lord Justice Mummery, giving the ruling of the Court of Appeal today, said that, if the bank had intended to increase the guaranteed bonus to £515,000, this would have been made plain in letters to Mr Price-Jones.

Mr Price-Jones also argued that, even if there had been a mistake, he should not have to pay the sum back because he had stayed at the bank thinking he was a most valued employee.

Lord Justice Mummery said: "The fact that, but for his expectation of a very large additional bonus, he would have decided to seek similar employment elsewhere is not sufficiently significant, precise or substantial in extent to be treated as a change of his position which would make full restitution inequitable."

The appeal judges ruled Mr Price-Jones had been "unjustly enriched" and ordered him to pay back £250,000 plus £10,000 interest.

"The payment was a mistake. He has still got the money. There is no obstacle to repaying it," said Lord Justice Mummery.